SA’S MANUFACTURING OUTPUT IS ON THE RISE

MANUFACTURING output in South Africa could turn the corner for the better in the second half of the year if the energy crisis does not disturb momentum following the rebound in July.

However, if load shedding intensifies during the summer months – as Eskom has indicated – manufacturing output could continue to slow down and drag down the overall economic growth.

Data from Statistics South Africa (Stats SA) yesterday has shown that manufacturing output increased by 3.7 percent year-on-year in July after three consecutive months of downturn.

Manufacturing was the biggest drag on gross domestic product in the second quarter, falling by 5.9 percent after floods damaged factories and plants and disrupted logistics and supply chains in KwaZulu-Natal, while rotational power cuts intensified.

However, this July manufacturing print was still slower than the market’s forecast of between 4 and 4.5 percent.

Stats SA said six of the 10 manufacturing divisions recorded a rise in activity, with manufacturers in food and beverages and the automotive division making the largest positive contributions to growth.

Stats SA’s director of industry statistics, Nicolai Claassen, said manufacturers specialising in the production of food and beverages registered an increase of 9.7 percent year-on-year.

Claassen said the automotive division was also a major positive contributor to overall manufacturing production growth, recording an increase of 12.1 percent.

“The economy also saw increased output from manufacturers in communication equipment,” Claassen said.